Horsefeathers. The uemployment system does not object to your working at a regular little side job like this while receiving benefit. You just need to report it.
BE SURE that you report the work in the Sunday through Saturday week that it was worked, NOT when you get paid for it. It is to be reported in GROSS wages, not net. So if you work on Saturday and make $20 per hour, eight hours, you'd report $160 in the weekly certification you submit when that week is passed. It is not necessary that the reporting be to the exact penny accurate so much as that it be reported in the correct week, the actual Sunday through Saturday that you work it. The agency will do the calculation according to the state's particular procedure, giving you a certain amount without affecting your benefits, reducing them if appropriate, noting that you reported the weeks earnings, etc.
You will receive the U.I. benefit for the week, minus any deduction for the part time work that they need to take. If you make OVER the amount of your weekly benefit amount and report it, it will automatically stop the claim and you will have to re-open the claim to file for the following week. If you are consistently reporting more than you make on your weekly claim amount, you will have rendered yourself ineligible for unemployment benefits (for those weeks.) If your work then drops down in amount or hours, re-open the claim.
What would happen if you refuse to work any more on that job, is that guess what??? During the drawing of your unemployment claim, you have refused a job, turned down a job, stopped working on a job, and whether or not you report it, you should have. And since you have quit a job, you could end up disqualifying yourself for benefits. They'd need to do a decision on whether or not the job was suitable. Even if it is not determined to be suitable, your claim has been stopped, and lots of additional hold ups are added. Why give up your on-going part time gig and possibly cause yourself trouble when there's absolutely no need to do so? Just report it correctly, each week, after the week in which the money was earned.
And remember, within the u.i. system (which sees all reported wages from covered employers) there will be reported wages that show up from where you have been working on that job during the same time frame when you filed the unemployment claim. And when the agency receives this cross matched information, there will be an investigation. First they'd check your claim forms. Is any money being reported from xyz? If there is, they'll check to make sure it's reported correctly. If not, perhaps a meeting with you to get clarification of the whens and how muchs. We assume you have check stubs. But you're still good. You were making a good faith effort to report this income correctly. It's not fraud overpayment. If it's fairly accurate reporting, you may never hear a word from them.
Scenario two. The agency will check your claim and find NO money reported from xyz. They may contact xyz. "Oh, she quit when she got on unemployment!" they are told. Not good for you.
They will contact you. Did you quit this job? they will ask you. If you did, they'll ask, why did you not report that you had quit the job on your weekly certification? And this is how you get a problem with your unemployment benefits and that $50 or $100 a week ends up costing you your whole claim.
If you're reporting the money, receiving part of your U.I. check, perhaps having it reduced by a small amount each week, or perhaps not even making enough to affect your check, but still reporting it as it should be, then it will be okay. You will not receive a fraud overpayment notice of investigation and have to go off down that road.
Any reduction of your weekly benefit due to doing this work is NOT lost from the amount you can draw in total. It simply hangs around in the total, so that you could end up drawing more than a total of 26 weeks, but at a lesser weekly amount than you started out with. Playing silly games to try to "keep your benefits" based on this advice would be foolish.